TMI Blog2021 (1) TMI 385X X X X Extracts X X X X X X X X Extracts X X X X ..... service tax liability due to the government amounting to ₹ 1,07,37,503.00 for the related period which amount is slightly lesser than the amount quantified by the petitioner in its intimation dated 14th September, 2018 - The two dates i.e. 14th September, 2018 in so far the intimation is concerned and 3rd December, 2018 in so far the notice under section 87(b) of the Finance Act, 1994 is concerned are prior to the cut off date of 30th June, 2019. Therefore, having regard to the above, it can safely be said that the respondents were not justified in rejecting the declaration of the petitioner on the ground of ineligibility. Matter remanded back to respondent No.6 to consider the declaration of the petitioner in terms of the scheme as a valid declaration under the category of investigation, enquiry and audit and thereafter grant the consequential reliefs to the petitioner - petition allowed. by way of remand. - WRIT PETITION (L.) NO.4685 OF 2020 - - - Dated:- 7-1-2021 - UJJAL BHUYAN ABHAY AHUJA, JJ. Mr. Bharat Raichandani i/by M/s UBR Legal, Advocate for the Petitioner. Mr. Pradeep S. Jetly, Senior Advocate with Mr. J.B. Mishra, Advocates for the Responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the period in question. Though payment of ₹ 60 lakhs was made, the balance amount was yet to be paid for the reasons mentioned in the said letter. Therefore, further time was sought for. 8. Respondent No.4 by his letter dated 10th September, 2018 granted further 45 days time to pay the outstanding service tax dues as a one time relaxation. 9. Petitioner has stated that by the intimation dated 14th September, 2018, it had informed respondent No.5 about the service tax liability till June, 2017, details of which are as under:- Financial Year Total Service Tax Payable Service Tax Paid Service Tax Payable 2012-13 66,59,168 66,59,168 0 2013-14 63,70,236 57,57,473 6,12,763 2014-15 46,63,370 20,50,000 26,13,370 2015-16 48,26,575 0 48,26,575 2016-17 35,85,247 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was valid. In this connection petitioner has placed reliance on the circular of the Central Board of Indirect Taxes and Customs dated 27th August, 2019. 18. Respondents have filed affidavit in reply through Shri Yudhast Kumar, Deputy commissioner(Investigation), CGST, Mumbai (W). Stand taken in the affidavit is that during the course of investigation statement of the partner of the petitioner Shri Patel was recorded on 26th March, 2018, wherein he admitted that petitioner had collected service tax from its clients but made short payment to the service tax department to the extent of ₹ 203 lakhs till June, 2017. However, in his subsequent statement dated 29th May, 2018 he revised the outstanding dues to ₹ 250 lakhs. Subsequently, in the letters dated 31st May, 2018 and 4th September, 2018 petitioner continued to revise the outstanding service tax dues at ₹ 278 lakhs and ₹ 205 lakhs respectively. In such circumstances, it is contended that there was no fixed dues quantified by the petitioner who kept on changing the quantum of outstanding dues. 19. Regarding the notice issued under section 87 of the Finance Act, 1994 it is contended that the same was iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n acknowledgment of the fact that the outstanding dues of the petitioner had crystallized whereafter the recovery proceedings were initiated. 26. Learned counsel for the parties have made elaborate submissions more or less identical to the pleadings before us. Therefore, it may not be necessary to extensively refer to the arguments made by learned counsel for the parties. However, the submissions so made have been given due consideration. 27. Issue raised in the present writ petition i.e. eligibility of the petitioner or maintainability of its declaration to avail the benefits of the scheme under the category of investigation, enquiry or audit on the ground that quantification of the service tax dues of the petitioner for the related period was not quantified on or before 30th June, 2019 is no longer res-integra. 28. In Thought Blurb Vs. Union of India, 2020-TIOL1813-HC-MUM-ST, this court faced with a similar issue referred to the circular dated 27th August, 2019 of the Central Board of Indirect Taxes and Customs (briefly the Board hereinafter) whereafter it was held as under :- 47. Reverting back to the circular dated 27th August, 2019 of the Board, it is seen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice tax liability of ₹ 60 lakhs (approximately) to be outstanding for the period from 20152016 to June, 2017. This was corroborated by the departmental authority in the letter dated 24.01.2018 which we have already noted and discussed. Therefore, present is a case where there is acknowledgment by the petitioner of the duty liability as well as by the department in its communication to the petitioner. Thus, it can be said that in the case of the petitioner the amount of duty involved had been quantified on or before 30.06.2019. In such circumstances, rejection of the application (declaration) of the petitioner on the ground of being ineligible with the remark that investigation was still going on and the duty amount was pending for quantification would not be justified. 28. This position has also been explained by the department itself in the form of frequently asked questions (FAQs). Question Nos.3 and 45 and the answers provided thereto are relevant and those are reproduced hereunder :- Q3. If an enquiry or investigation or audit has started but the tax dues have not been quantified whether the person is eligible to opt for the Scheme? Ans . No. If an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation that an amount of ₹ 1,20,60,000.00 was already paid. * * * * * * * * 26. Following the above it is evident that the word quantified under the scheme would mean a written communication of the amount of duty payable which will include a letter intimating duty demand or duty liability admitted by the person concerned during enquiry, investigation or audit or audit report and not necessarily the amount crystalized following adjudication. Thus, petitioner was eligible to file the declaration in terms of the scheme under the category of enquiry or investigation or audit as its service tax dues stood quantified before 30.06.2019. 31. From the above it is evident that all that would be required for being eligible under the above category is a written communication which will mean a written communication of the amount of duty payable including a letter intimating duty demand or duty liability admitted by the person concerned during inquiry, investigation or audit. 32. In so far the present case is concerned, it is evident hat petitioner had given details of its outstanding service tax liability upto June, 2018 vide its intimation dated 14th September, 2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted party before the decision is taken so that the affected party can properly defend its case. 36. That apart, in Thought Blurb we have held that when there is a provision for granting personal hearing in a case where the declarant disputes the estimated amount, it would be in complete defiance of logic and contrary to the very object of the scheme to reject a declaration on the ground of being ineligible without giving a chance to the declarant to explain as to why its declaration should be accepted and relief under the scheme be extended to him. It was held as under :- 51. We have already discussed that under sub sections (2) and (3) of section 127 in a case where the amount estimated by the Designated Committee exceeds the amount declared by the declarant, then an intimation has to be given to the declarant in the specified form about the estimate determined by the Designated Committee which is required to be paid by the declarant. However, before insisting on payment of the excess amount or the higher amount the Designated Committee is required to give an opportunity of hearing to the declarant. In a situation when the amount estimated by the Designated Committee is i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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